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Deciding if a Roth IRA Conversion is For You

Roth IRAs can be a powerful tax tool, but they are often misunderstood and misused. Investment income in Roth IRAs compound tax-free and most distributions are tax-free as well. Another benefit is that there are no required minimum distributions (RMDs) throughout the original owner’s life. Long-term Roth distributions are tax-free to the beneficiaries who inherit the IRA as long as they fully distribute the Roth within 10 years of inheriting. As the annual contribution limits are rather small, most Roth IRA contributions are made by converting a traditional IRA to a Roth IRA. The downside to conversion is that you’ll have to pay tax on the gross amount converted. Considering… Read More

What To Know About Filing For Bankruptcy

About one million Americans file for personal bankruptcy each year, with one in 10 households having filed at some point. Given the loss of jobs, reduced income, and the coronavirus recession in 2020, those numbers could increase this year if the economic recovery is not both swift and omnipresent. There are two main types of personal bankruptcy: Chapter 7 and Chapter 13. Chapter 7, which is the more common option, will liquidate the filer’s assets in order to discharge all or a portion of the outstanding debt. People generally choose this route because they are in way over their heads and do not earn enough income to pay their debts… Read More

How Will the Biden Administration’s China Policy Impact Markets?

The Obama and Trump administrations couldn’t have had a more different approach when it came to U.S. relations with China. As the Institute for China-America Studies (ICAS) explains, under the Obama administration, the United States favored a trade and investment approach when dealing with China, while the Trump administration had a national security focus. The ICAS believes the Biden administration will address trade and economic imbalances through a modified approach, including reducing tariffs on imported Chinese goods over time to decrease inflation for American consumers. Another example is maintaining pressure on China to cut government subsidies for competing industries, currency games, and exporting products to the United States at artificially… Read More

COVID-19 Vaccination Considerations for Employers

Looking at a 2009 letter from the U.S. Department of Labor, Occupational Safety and Health Administration (OSHA), employers may be able to require their employees to take the COVID-19 vaccine, with a few exceptions (such as the likelihood of a life-threatening reaction to it). With the COVID-19 vaccine being rolled out, how can employers balance workplace safety, maintain productivity and stay within the law? According to the Centers for Disease Control & Prevention (CDC), the early vaccination stages will likely focus on those who are at particular risk of severe and life-threatening complications from COVID-19. This is expected to include elderly individuals, especially those who live in nursing homes. It’s… Read More

Paying the Price for Vice: The Evolving Landscape of Excise Taxes in America

While excise or vice taxes have long been a part of the American tax landscape related to alcohol and cigarettes, the recent invention of vaping and legalization of marijuana and other substances is changing the landscape. What Are Excise Taxes? Excise taxes are taxes on specific types of consumable products such as alcohol or tobacco for one of two reasons. First, as vice taxes in order to raise revenue to cover the costs related to consumption; and second, to deter consumption itself. Unlike other types of consumption taxes such as sales tax, these are specific to certain products. Do They Change Behavior? Theoretically, when you increase the price of a… Read More

A Flush of Protections for Veterans and Native Americans

Veterans’ Compensation Cost-of-Living Adjustment Act of 2020 (HR 6168) – Introduced by Rep. Elaine Luria (D-VA) on March 10, this bill increases Vet compensation benefits by 1.3 percent (the same as for Social Security recipients). The increase impacts veteran disability compensation, compensation for dependents, the clothing allowance for certain disabled veterans, and dependency and indemnity compensation for surviving spouses and children. This bill passed in the House in May and the Senate in September, and was signed into law by the president on Oct. 20. Veterans’ Care Quality Transparency Act (HR 2372) – Designed to improve mental health care for veterans and reduce suicide rates, this bill was introduced by… Read More

Will StarLink be the Next Disruption to the Telecommunication Industry?

With every new project comes expectations, uncertainties, questions, opposition, and more. Elon Musk’s StarLink internet is one such project. Just last month, on Nov. 24, SpaceX launched 60 StarLink internet satellites – making a total of more than 900 of its flat-panel satellites already on low earth orbit (LEO). This also marked the company’s 23rd space launch since the start of 2020. But just what is StarLink; why is it a big deal; and will it replace existing internet infrastructure? Follow along for information already in the public domain that will help answer some of these questions. What is StarLink? StarLink is an initiative by SpaceX that aims to provide… Read More

COVID-19 Vaccine Rollout: Where We Are So Far

While the pandemic is not over, we do have some good news. There are vaccines and they will be available soon. Here’s where we are in terms of an overall plan and where states are with distributing the vaccines. Operation Warp Speed The current administration has already purchased hundreds of millions of doses of several vaccine candidates. Two of them are from Moderna and Pfizer and they’ve shown significant efficacy in Phase 3 clinical trials. The incoming Biden administration will take on distribution and has established a COVID-19 Task Force. A limited number of doses may become available as early as December. The Interim Playbook This document from the Center… Read More

Last Minute Financial Moves for Year’s End

There are certain year-end financial transactions that must clear by Dec. 31 to be reported on the 2020 tax return. It’s important to take a good look at your financial portfolio in light of the plethora of unusual events that occurred this year. Now is a good time to see if you have fallen off track and reposition your portfolio for better opportunities in 2021. Investment Portfolio Despite the dramatic stock market drop that accompanied the outbreak of COVID-19 on our shores, markets have recovered remarkably well. This means the traditional strategy of harvesting gains and losses at year-end could be appropriate for many investors. When your capital losses are… Read More

How Will the Biden Administration Influence the Federal Reserve?

With the nation on the precipice of a transition of administrations on Jan. 20, 2021, there will need to be many roles filled both in and out of the White House. With the potential for Janet Yellen to replace Steven Mnuchin as the next treasury secretary, there is much speculation about how the Federal Reserve will be shaped by the Biden administration. Predicting Changes to the Federal Reserve When 2022 arrives, Chair of the Federal Reserve Jerome Powell’s term will expire. While presidents have historically given another term to first-term chairs who were appointed by the outgoing administration, there is no indication that Powell will stay on for another year.… Read More